After a long career at Barron's, I joined Forbes as San Francisco bureau chief in December 2010. I've been writing about technology and investing for more than 25 years. With the Tech Trade, I've picked up where I left off when I was writing the Tech Trader Daily blog at Barrons.com. When I'm not working, you can find me riding my road bike around the Bay Area hills, managing my fantasy baseball team, rooting for my beloved Phillies and Eagles and hanging out in the Valley with my family. You can follow me on Facebook, on Twitter (@savitz), and on Google+.

MetroPCS Retreats On T-Mobile Deal; Leap Hits Pothole

The more MetroPCS holders examine the company’s merger with Deutsche Telekom’s MetroPCS, the more dismayed they must be.

After running up yesterday after DT disclosed that it was in talks with MetroPCS about a deal, the pre-paid wireless company’s shares have moved into retreat mode following disclosure of the terms of the complex deal. The company will complete a one-for-two reverse split, pay a divided of $4.09 a share on pre-split shares, and consummate a reverse merger in which MetroPCS would be the surviving company, with Deutsche Telekom holding a 74% stake.

What PCS holders no doubt were hoping for is that the company would simply get taken out. Instead, they find themselves as minority investors in a deal structured to give DT potential liquidity down the road.

And there are other potential losers here.

Town Hall Research analyst Jamie Townsend points out in a research note that with this deal, “the available options for future consolidations in the wireless network business are severely reduced.” He contends with both T-Mobile and MetroPCS removed as potential partners for other players for at least q couple of years, the options are considerably reduced for Sprint, in particular. He says Dish Networks could still be in the market for a partner, but that Clearwire would be a more likely target than Sprint. Clearwire, meanwhile, “has lost two potential wholesale customers.” Dish Network still want to get into the mobile business, but Townsend contends going it alone would be “a recipe for disaster,” while the list of potential partners is now sharply reduced.

The big loser today is actually Leap Wireless, a company long speculated to be a potential consolidation target, which seems to be without a dance partner.

In today’s trading:

PCS is down $1.20, or 8.9%, to $12.36.

Leap Wireless, which had spiked yesterday on the first reports that a deal was in the works, has reversed course, and is now down $1.18, or 15.5%, to $6.41.

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